Verizon comes good for Vodafone at last
Vodafone’s shareolders will be buoyed by the announcement that Verizon Wireless, the US mobile network operator in which Vodafone has a 45% stake, will at last pay a dividend of $10bn. This will enable Vodafone to pay a 4.0p special dividend, with the £800m balance going to pay down debt.
The Verizon dividend, announced last night, will be paid on 31 January 2012. It is the first money Vodafone has seen from its investment since 2005, since when Verizon concentrated on paying down debt. The timing of the Vodafone distribution will be announced on 8 November 2011.
Vodafone’s share price on Thursday closed at 165.40p, up from its opening at 163.20, up almost 11% on a year ago when the company started selling off firms in which it did not own a controlling stake.
Verizon’s dividend suggests Vodafone may hang on to the American carrier for a while yet. Vodafone CEO Vittorio Colao said, “Our long term partnership in Verizon’s strong and successful wireless business has seen the value of our investment increase significantly over recent years.
“The dividend from Verizon Wireless allows us not only to reward our own shareholders with an immediate and sizeable cash return, but also to continue to reinvest in our business to improve our customers’ experience, further strengthen our competitive position and create additional value for shareholders.”